There are cheap stocks, and then there are far below averages, super-undervalued, incredibly cheap stocks. The TSX stocks I’m going to discuss today are definitely in that category. Each trades under $5 per share, and offers insane value on the TSX today.
The main issue regarding these three TSX stocks? Each is in a sector that’s doing quite poorly, and could do even worse in the year to come. On the surface, that looks like bad news. But long-term investors should know better.
If you hold these three TSX stocks far longer, you’re bound to see shares not only improve, but soar past the $5 share price they currently offer.
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Canopy Growth
First up we have former heavy hitter Canopy Growth (TSX:WEED). Canopy Growth stock hit all-time highs near $70 per share before falling into oblivion. And what’s more, things seem to have gone from bad to worse. Not only was it one of the only cannabis producers to still not produce a profit, it seems be undergoing layoffs and cost cutting quarter after quarter.
But it’s not all bad news. After news that there would be pardons from the White House for simple marijuana possession, Canopy Growth stock moved forward with their plan to take over the U.S. cannabis market.
Further, the company also has profitable avenues such as sports drinkmaker BioSteel working for them. In this case, in the next decade, Canopy Growth stock could narrow in on some new profit-producing ventures, while taking on the largest cannabis market in the world.
Canopy Growth stock is one of the TSX stocks trading below $5 at $3.15 per share as of writing. Shares are down 64% in the last year.
Dorel
Another company that’s seen a major drop in the last year is Dorel Industries (TSX:DII.B). The company made a huge move during the pandemic, selling off its biking sector for a major cash infusion.
With those bicycle days long gone, Dorel is now focusing on home and baby products. These aren’t products that are top of mind during a recession. The company has missed estimates quarter after quarter, sending shares in a downward spiral.
So, let’s focus on the future. Now Dorel stock is definitely undervalued. It trades at just 0.35 times book value as of writing! When inflation gets under control and we come out of a recession, analysts practically guarantee a surge in share price. Definitely higher than the $4.65 where it trades right now. Meanwhile, shares are down 60% in the last year alone.
Ensign
Finally, Ensign Energy Services (TSX:ESI) is one of the TSX stocks I would certainly consider that’s under $5 on the TSX today. But here’s the twist, Ensign stock has actually been doing quite well over the last few years.
With the bump in oil and gas prices, Ensign stock climbed for investors. In fact, shares are still up by 24% in the last year alone! Even so, with share prices so low investors will likely continue to feed into the stock whenever there is strength in the oil and gas sector.
Analysts predict its current $3.19 share price could actually double in the next year alone. So I would certainly consider buying this stock for a quick turnaround over the next few years.
